Paying for an apprenticeship
When providers will receive payments, reporting requirements and agreeing a price. Includes employer contribution towards training (co-investment) and VAT.
New for 1 August 2022:
- EP183 - Clarification: To reflect the how funding for an apprenticeship is determined.
EP183
Funding for an apprenticeship is determined by whether there are levy funds available in your apprenticeship service account each month. In any particular month:
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EP183.1 If levy funds are available in your account, these will be used to pay that month’s instalment. Where the levy funds are insufficient to cover the monthly instalment, the difference will be paid through government-employer co-investment.
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EP183.2 If you do not have levy funds in your apprenticeship service account, that month’s instalment will be funded through government-employer co-investment.
New for 1 August 2022:
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We have deleted the information around specific eligible costs for employer providers – all information on eligible (and ineligible) costs can be found in paragraphs EP93 to EP96.
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EP184 - New rule: We no longer require the actual delivery cost of the apprenticeship on the ILR and the apprenticeship service, where this figure is above the funding band. The price that you enter into both the ILR and the apprenticeship service is the funding that you are claiming from us (the maximum of the funding band minus the cost of any relevant RPL and any further discounts). You must enter the same price into the ILR and the apprenticeship service. If the evidenced price exceeds the maximum of the funding band, then you must absorb these additional costs.
EP184
You can receive funds from your apprenticeship service account or government-employer co-investment for training delivered to your own employees if you are approved by us as an employer-provider on the Register of Apprenticeship Training Providers.
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EP184.1 Approved employer-providers can directly deliver all or part of their apprenticeship training programme to their own employees, including employees that have been subject to redundancy, or those employed by a connected company or charity.
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EP184.2 Your evidenced price must be no more than the maximum of the funding band for the standard.
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EP184.3 If the evidenced price exceeds the maximum of the funding band, then you must absorb these additional costs (outside of the ILR and apprenticeship service). We do not need to know about the amount of this difference. This difference must not be funded from the apprenticeship service account or co-investment.
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EP184.4 The price you enter into the ILR and the apprenticeship service must be the same.
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EP184.5 The price you enter into both the ILR and apprenticeship service is the evidenced price minus the costs of relevant prior learning(see paragraphs EP25 to EP26). This new maximum funding amount becomes the starting point for any further reduction on price (e.g. additional discounts may be applicable if the apprentice is part of a large cohort).
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EP184.6 Where you do not know the details of the end-point assessment organisation at the start of the apprenticeship, you must enter the price for end-point assessment (in TNP2) once this has been confirmed. This field in the ILR must be left blank until the price of the end-point assessment has been confirmed to ensure accuracy.
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EP184.7 The prices entered onto the ILR must not include any VAT, which may be charged on employer co-investment.
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EP184.8 The funding bands and the standards placed within them, may be subject to change.
EP185
Once the price has been negotiated, we do not expect the total price of the apprenticeship to increase. The only exceptions to this are when there is a change of circumstances or when the end-point assessment cost is not known at the start of the apprenticeship and later added.
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EP185.1 If either the TNP1 or the TNP2 price changes during the apprenticeship, the reason for this change must be documented in the evidence pack.
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EP185.2 We will monitor changes of price and patterns of behaviour to identify any fraudulent activity. You can find further information on changes of circumstance in the ‘change of circumstances’ section (see paragraphs EP243 to EP297).
EP186
If you evidence costs that are more than the maximum allowed by the funding band for the chosen apprenticeship, then you must pay in full the difference between the band maximum and the total cost. This cannot be funded from the apprenticeship service account or co-investment.
EP187
The funding bands and the standards placed within them, may be subject to change.
EP188
We will monitor training and end-point assessment costs to ensure that you achieve best value, such as economies of scale, which you must take into consideration when you calculate delivery costs.
EP189
Where you have insufficient funds in your apprenticeship service account, we will pay the government’s co-investment contribution (currently 95% of the cost) towards the costs of training and you will be expected to meet the remaining costs (employer co-investment).
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EP189.1 The only exceptions to employer co-investment (currently 5% of the cost) are:
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EP189.1.1 English and maths, to achieve the required government standard (see paragraphs EP113 to EP135);
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EP189.1.2 Where you qualify for extra support for small employers (see paragraph EP112);
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EP189.1.3 For any learning support for the apprentice (see paragraphs EP78 to EP89);
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EP189.1.4 For any additional payments (see paragraphs EP98 to EP105); and
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EP189.1.5 Where you deliver to your own staff as an employer-provider.
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New for 1 August 2022:
- We have moved this section from earlier in the document.
EP190
The apprentice must not be asked to contribute financially to the eligible costs of training, on-programme or end-point assessment.
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EP190.1 This includes both where the individual has completed the programme successfully or has left the programme early.
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EP190.2 Costs include any co-investment or additional training and assessment costs above the funding band, that you have incurred / absorbed where this is part of the agreed apprenticeship.
EP191
We will pay 80% of the cost (TNP1 and TNP2) up to the maximum value of the funding band, in equal monthly instalments according to the planned duration of the apprenticeship, regardless of how training is scheduled over the planned duration. This will be deducted from your apprenticeship service account where funds are available.
EP192
We will pay the remaining balance of the agreed price up to the maximum value of the funding band when the apprentice has undertaken all the activity relevant to the apprenticeship, including completing all elements of the end-point assessment.
EP193
The deductions from your apprenticeship service account will mirror these payments where funds are available.
EP194
Where apprenticeship training is not funded from your levy funds (e.g. levy payers with insufficient funds and non-levy payers), we will pay 80% of the government co-investment funding in equal monthly instalments according to the planned duration of the apprenticeship, regardless of how training is scheduled over the duration of the apprenticeship.
EP195
Supplies of training, or end-point assessment, which are paid by government funding, including the apprenticeship levy, are exempt from VAT. This includes additional payments (see paragraphs EP98 to EP105). Prices entered onto the ILR must not include VAT.
EP196
We do not provide advice on VAT. You must always seek your own advice on VAT from HMRC if you are in any doubt about VAT treatment.
New for 1 August 2022:
- EP203 - Clarification: You must make sure that the PAYE scheme used in the apprenticeship service account for the apprentice is linked to the National Insurance number for the apprentice declared by you in the ILR.
EP197
You must only add PAYE schemes for you or your connected companies or charities (according to HMRC’s definition) to your apprenticeship service account.
EP198
Public bodies cannot usually be connected for apprenticeship levy purposes. If you are setting up an apprenticeship service account for a public body, you must only add the PAYE scheme or schemes for one employer, that is, a government department, local authority, or non-ministerial department.
EP199
There are some exceptions where public bodies are considered to be corporate bodies, companies, or charities. If your organisation is connected as defined by HMRC employment allowance connection rules and shares one apprenticeship levy allowance, then you could set up an account with another connected employer.
EP200
We will monitor accounts to check that PAYE schemes are properly used. If we have any questions, we may ask you to provide evidence that the employers sharing an apprenticeship service account are connected.
EP201
You must:
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EP201.1 Remove PAYE schemes from your apprenticeship service account that are no longer operated by the employer associated with the account (or who leaves the group of connected companies);
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EP201.2 Ensure the PAYE scheme for the apprentice’s employer is associated with the same apprenticeship service account which records the apprenticeship for them; and
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EP201.3 Manage users associated with your account including:
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EP2013.1 Removing users who are not authorised to act on your behalf; and
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EP201.3.2 Controlling who can add users.
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EP202
You are responsible for recording the required details of the apprenticeship in your apprenticeship service account and this must correspond with the information recorded on the ILR.
EP203
You must make sure that the PAYE scheme used in the apprenticeship service account for the apprentice is linked to the National Insurance number for the apprentice declared by you in the ILR.
EP204
You must not allow any third party to authorise payments through your apprenticeship service account.
EP205
As a result of retrospective changes to the amount of apprenticeship levy declared to HMRC, the balance in your apprenticeship service account could go up or down. If an adjustment reduces your balance to a negative value that persists, we may ask you to pay us this value, discounted by the co-investment rate in place when the apprenticeship started. We will provide you with details of this payment including the amount due and when to make a payment.
EP206
If your organisation is subject to structural changes including mergers and acquisitions, you must contact us.
EP207
To qualify for apprenticeship funding the apprentice must be in learning for a minimum of 42 days between the learning start date and learning planned end-date.
EP208
If a learner withdraws without completing one episode of learning, for example without attending the first class, then they must not be included in the ILR.
EP209
Where funding is paid for an apprentice who does not subsequently meet the qualifying period, we will recover the funding from you.
EP210
Funds received by employer-providers from your apprenticeship service account (including government top-ups to funds), government-employer co-investment and additional payments do not fall within the scope of subsidy control from 1 August 2022 to 31 July 2023.
EP211
The waiving of the employer contribution for small employers, (see paragraph EP112) is likely to amount to subsidy control and the subsidy control rules will therefore apply to such cases. For more information on Subsidy Control, please visit the Subsidy Control guidance page on GOV.UK.
EP212
Transfers of funds are subject to subsidy control regulations. For any transfer an employer receives, a percentage of the transferred funds will count towards their Small Amounts of Financial Assistance exemption. This percentage represents the amount of co-investment you would have otherwise had to contribute towards the apprenticeship, if funds had not been transferred. The percentage rate is dependent on when the apprenticeship started:
| Co-investment rates for apprenticeships that started: | |
|---|---|
| before 1 April 2019 | on or after 1 April 2019 |
| 10% | 5% |
EP213
You must ensure you complete a subsidy control declaration for funding you receive as a result of the waiver of the employer contribution for small employers and transfers. You are responsible for retaining a copy of this declaration in the evidence pack.